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2016 (12) TMI 1278 - HC - Service TaxChallenge to the show cause notice - period from April 2012 to March 2015 - the petitioner has already submitted their reply to the show-cause notice, vide reply dated 08.12.2015 and in the reply, the petitioner has raised various grounds, including the ground that the issue is pending before the CESTAT. The petitioner has sought for two reliefs from the first respondent and the second relief is an alternative relief to the first relief. The first relief is to drop the proceedings, by accepting the reply. The second relief is to defer the proceedings till the conclusion of the matter before the CESTAT. To consider the second issue, it would be necessary for the adjudicating authority to examine as to whether the issues which are pending before the CESTAT are identical to that of the issues, which are raised in the impugned show cause notice. Held that - Court cannot interdict the impugned show cause notice and the petitioner should participate in the adjudication process. However, this Court is inclined to issue appropriate directions, so that the plea for deferring the proceedings is considered as first among the several issues by the first respondent. This should not be understood that the issue is to be considered as a primary issue, but it shall be considered as first among the several issues raised by the petitioner. - Matter to be heard on merit.
Issues involved: Challenge to a show-cause notice demanding Service Tax, interest, and penalty for a specific period; Request to defer proceedings pending before the Tribunal; Consideration of exemption under the negative list post a regime change.
Analysis: 1. The petitioner, a corporation, challenged a show-cause notice demanding Service Tax, interest, and penalty for a specific period. The petitioner contended that a previous Order-in-Original was challenged before the CESTAT, and a request for early hearing was accepted but not pursued due to lack of quorum. The petitioner sought to defer proceedings until the CESTAT matter is resolved. The respondent issued personal hearing notices despite the petitioner's request for abeyance, leading to the Writ Petition challenging the show-cause notice. 2. The petitioner did not seek to quash the notice but requested to keep it in abeyance due to a pending identical issue before the Tribunal. The respondents argued that the exemption post the regime change only applied to transmission or distribution of electricity, not other services by the utility. The petitioner argued that recent notifications supported their contention for abeyance, emphasizing the need to defer the show-cause notice. 3. The Court noted the petitioner's reply to the notice, raising various grounds, including the pending CESTAT issue. The petitioner sought two reliefs: dropping the proceedings based on their reply and deferring proceedings until the CESTAT matter concludes. The Court directed the respondent to consider the petitioner's reply, provide a personal hearing, and prioritize the request to defer proceedings until the CESTAT matter is resolved. The Court rejected the plea to quash the notice, emphasizing the need for the petitioner to participate in the adjudication process. 4. The Court dismissed the Writ Petition but issued a direction to consider the petitioner's request to defer proceedings as the first among several issues raised. This direction aimed to safeguard the petitioner's interests during the proceedings. The Court emphasized the importance of considering the CESTAT matter in the adjudication process and instructed the respondent to pass a comprehensive order in accordance with the law. 5. The Writ Petition was dismissed with no costs imposed, and connected miscellaneous petitions were closed, concluding the legal judgment concerning the challenge to the show-cause notice and the request to defer proceedings pending before the Tribunal.
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